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Google and Facebook would have failed in Sri Lanka: FM

Nov 17, 2017 10:50 AM GMT+0530 | 2 Comment(s)

ECONOMYNEXT - Finance Minister Mangala Samaraweera has severely criticised Sri Lanka's lending institutions saying that they would not have funded the founders of Google and Facebook if they were to start up in the island.

Addressing parliament at the final second reading of the 2018 budget on Thursday, Samaraweera said Sri Lanka's lending institutions were not geared to funding young entrepreneurs and had not kept pace with changing needs of customers.

"The next Google or Facebook could be developed in Sri Lanka, but in today's capital market, it will probably go unfunded," the minister said. "This is why we need reform - we need to fix systems that are not working."

The Enterprise Sri Lanka credit scheme, the SME guarantee fund, the Development Bank, will work together to mend Sri Lanka's "dysfunctional capital markets," he said.

He said he intended to drive reform through his maiden budget.

"Capital market liberalisation does not mean unfettered opening up of markets. In the past, successive government's role in financial markets has been in owning and operating numerous banks and financial institutions.

“A young entrepreneur with an exciting innovation will struggle to find a financial institution who will lend him or her money without asking an arm and leg in collateral,” he said

"Most of these have failed to provide access to affordable capital for our SMEs and entrepreneurs," he said.

He said the government did not intend to run businesses and noted that state owned enterprises had accumulated a debt of 1.4 trillion rupees.

"Sri Lanka must move on from the shackles of excessive state controls and return to its roots of vibrant free enterprise," he noted.

He said the government will also reform labour laws.

"Today's labour laws dictate and restrict working hours of our women and men. They do not reflect modern working conditions including technological innovations that enable work from home or remote work.

"Our labour laws do not even include most contemporary jobs. We intend to modernise these laws to enable our men and women to have more choice in their working conditions and how they work," he added.

He said reforms will not undermine the rights of the workers. "We will empower our workers with more freedom and more choice.”

Sri Lanka is currently facing a serious labour shortage and many sectors have asked the government to allow them to import workers from neighbouring countries.
(COLOMBO, November 17, 2017)